Tesla's price war: Can Tesla's stock price continue to rise?

To the Moo joined discussion · Jun 7, 2023 06:21

Since May, Musk's wealth has continued to soar, and as of yesterday's closing, $Tesla(TSLA.US)$ has risen by 30%, with a total increase of over 70% this year.

source：moomoo

According to the Bloomberg Billionaires Index, Musk's net worth is currently around $200 billion, regaining the title of the world's richest person. Some market observers believe that Musk's appointment of Linda Yaccarino as the new CEO of Twitter indicates that he will focus more time and energy on Tesla, leading investors to quickly embrace the company.

Tesla's recent price-reduction sales strategy seems to have yielded swift and positive outcomes.

According to data, Tesla's inventory has been decreasing recently compared to the record-high inventory in April. As of June 4th, the inventory has decreased by 17%, from 2,689 vehicles to 2,234 vehicles.

source：Matt Jung

Further analysis of inventory data reveals that the number of Tesla Model Y vehicles has decreased by nearly two-thirds, from 606 vehicles in mid-April to 219 vehicles at the beginning of June. This coincides with Tesla's significant price reductions on the Model Y and the inclusion of all versions of the Model Y in the federal electric vehicle tax credit program.

source：Matt Jung

In recent months, inventory of high-priced Model S and Model X has also decreased, but inventory of Model 3 has steadily increased throughout the year.

In contrast, according to data from well-known Tesla production and sales analyst Troy Teslike, as of mid-May, Tesla's global order backlog had increased by 22% from 68,000 vehicles two weeks ago to 83,000 vehicles. Further analysis shows that the order backlog in the United States has increased from 24,000 to nearly 40,000, indicating that Tesla's price cuts in mid-April are boosting demand.

source：Troy Teslike

Data shows that as of mid-May, the order backlog in the United States for Tesla was 27 days, an increase of seven days from two weeks ago. (*Order backlog in days is related to the expected waiting time for customers when placing new custom orders.)

It is worth noting that Tesla will release its second-quarter sales data at the beginning of July, and investors hope that the company can achieve significant growth compared to the first quarter (422,000 vehicles).

In addition, Musk dropped another bombshell in the auto industry: Tesla's FSD (Full Self-Driving) can be opened up to other carmakers! When Mary Barra, CEO of Ford, praised Tesla's technology, Musk responded on Twitter stating that Tesla has always been committed to helping other automakers and is willing to license Autopilot or FSD to other companies.

Tesla's price war: Can Tesla's stock price continue to rise?

It is worth noting that Musk recently stated in a CNBC interview that the arrival of ChatGPT for autonomous driving is accelerating.

How does Wall Street view this?

However, since the beginning of the year, investors have become increasingly confident in the upcoming interest rate cuts and the global AI trend, which has boosted the confidence of investors in technology stocks. Wall Street analysts have also expressed optimism.

Dan Ives, an analyst at the US investment bank Wedbush, wrote in a report, "Overall, Tesla is in a favorable position to benefit significantly from the application of generative artificial intelligence to its product suite and business model, further accelerating profit growth."

"Wall Street Goddess" Woodstock even made a bold statement, stating that after updating her Tesla pricing model, she expects the expected value per share of Tesla to reach $2,000 by 2027 under baseline circumstances.

In the past three months, a total of 28 analysts have made predictions on Tesla's target price, with the highest target price being $280, which still has a potential increase of 26.5% compared to the current stock price.